Business expenditure on R&D (BERD) in 2003-04 was $7,220 million (m) or 10% higher than that recorded in 2002-03 (table 25.2). This is the highest level recorded and is the fifth successive year of increase following the declines from 1995-96 to 1998-99 and the levelling off between 1998-99 and 1999-2000. In volume terms, with the effect of changes in prices and wages and salaries removed, BERD increased by 7% compared with 2002-03.

In 2003-04 Australia's BERD was 0.89% of GDP, subsequent to a levelling off in 2002-03. Table 25.7 shows Australia's BERD/GDP ratio compared with those of other OECD countries for which comparable data is available.

25.7 BUSINESS EXPENDITURE ON R&D AS A PERCENTAGE OF GDP, OECD countries

2000-01

2001-02

2002-03

2003-04

Country

%

%

%

%

Sweden

n.a.

3.31

n.a.

2.95

Finland

2.41

2.42

2.41

2.46

Japan

2.12

2.26

2.32

2.36

Korea

1.77

1.97

1.90

2.01

United States of America

2.04

2.00

1.87

1.79

Denmark

n.a.

1.65

1.75

n.a.

Germany

1.75

1.75

1.75

1.73

Belgium

1.48

1.60

1.63

1.71

Iceland

1.55

1.80

1.77

1.67

France

1.36

1.41

1.43

1.36

United Kingdom

1.21

1.24

1.26

1.24

Canada

1.15

1.27

1.09

1.03

Norway

n.a.

0.96

0.96

1.00

Netherlands

1.11

1.10

1.02

0.99

Australia

0.74

0.87

0.87

0.89

Ireland

0.82

0.78

0.77

0.80

Czech Republic

0.74

0.74

0.75

0.77

Spain

0.50

0.50

0.56

0.60

Italy

0.53

0.55

0.56

0.55

New Zealand

n.a.

0.42

n.a.

0.47

Slovak Republic

0.43

0.43

0.37

0.32

Hungary

0.35

0.38

0.36

0.35

Portugal

0.22

0.27

0.30

n.a.

Turkey

0.21

0.24

0.19

n.a.

Poland

0.24

0.23

0.12

0.15

Source: OECD 2004.

The manufacturing industry was the largest contributor (46%) to total BERD. The property and business services, mining and finance and insurance industries were the next largest contributors to BERD at 23%, 11% and 9% respectively. The net increase in BERD between 2002-03 and 2003-04 was attributable to a 28% increase by the mining industry, and a 13% increase by the manufacturing industry. It should be noted that mineral exploration is excluded from the definition of R&D (table 25.8).

The manufacturing, and property and business services industries contributed the highest levels of human resources to R&D at 49% and 30% of total effort respectively. In 2003-04 the mining and manufacturing industries recorded increases in human resources devoted to R&D from 2002-03, of 43% and 6% respectively. The finance and insurance, and property and business services industries also showed increases of 17% and 18% respectively. Wholesale trade recorded a decrease of 13%.(table 25.8).

Engineering and technology, and information, computing and communication sciences were the research divisions with the highest R&D expenditure, at 54% and 26% respectively (table 25.9).

The engineering and technology, and information, computing and communication sciences research fields recorded the highest proportion of total human resources effort on R&D, contributing 49% and 33% respectively (table 25.9).

25.9 BUSINESS R&D RESOURCES, By research field(a) - 2003-04

Expenditure on R&D

Capital
expenditure

Labour
costs

Other
current
expenditure

Total

Human
resources
devoted
to R&D

$'m

$m

$m

$m

’000 person
years

Mathematical sciences

0.6

14.7

7.3

22.6

0.2

Physical sciences

1.9

26.6

17.9

46.5

0.3

Chemical sciences

13.2

86.4

110.0

209.6

1.2

Earth sciences

15.1

26.8

100.0

141.9

0.3

Biological sciences

16.1

110.4

100.1

226.6

1.3

Information, computing and communication sciences

73.7

1,168.7

658.1

1,900.4

12.6

Engineering and technology

311.0

1,422.3

2,185.5

3,918.8

18.6

Agricultural, veterinary and environmental sciences

25.8

83.6

125.8

235.3

1.2

Architecture, urban environment and building

1.9

9.6

21.6

33.1

0.1

Medical and health sciences

30.8

192.5

231.8

455.1

2.1

Education

0.1

2.3

2.7

5.1

-

Economics

0.1

3.2

2.2

5.6

-

Commerce, management, tourism and services

0.8

8.1

6.9

15.8

0.1

Studies in human society

-

0.1

0.1

0.2

-

Behavioural and cognitive sciences

-

0.5

0.3

0.9

-

Law, justice and law enforcement

n.p.

0.1

n.p.

0.5

-

Journalism, librarianship and curatorial studies

n.p.

n.p.

n.p.

n.p.

n.p.

The Arts

-

1.2

0.9

2.2

-

Language and culture

n.p.

n.p.

n.p.

n.p.

n.p.

History and archaeology

n.p.

n.p.

n.p.

n.p.

n.p.

Total

491.3

3,157.2

3,571.7

7,220.2

38.1

(a) Data were subjectively allocated by providers at the time of reporting, using OECD/ABS definitions. The ABS makes every effort to ensure correct and consistent interpretation and reporting of these data and applies consistent processing methodologies. Readers using these data should bear in mind the original subjectivity of the information.

In terms of socioeconomic objectives, business directed 90% of R&D expenditure into economic development ($6,532m). About 6% was directed towards society, 3% towards defence and 1% towards environment. Within economic development, manufacturing was the subdivision with the highest expenditure ($2,929m) followed by information and communication services ($1,125m) (table 25.10).

The same pattern applied to human resources devoted to R&D, with 88% (33,700 person years of effort) directed towards economic development, 7% directed towards society, 4% towards defence and 1% towards environment. Within economic development the subdivisions with the highest proportion of total human resources devoted to R&D were manufacturing (44%) and information and communication services (20%) (table 25.10).

25.10 BUSINESS R&D RESOURCES, By socioeconomic objective(a) - 2003-04

Expenditure on R&D

Capital
expenditure

Labour
costs

Other
current
expenditure

Total

Human
resources
devoted
to R&D

$m

$m

$m

$m

'000 person
years

Defence

4.8

104.0

68.6

177.4

1.4

Economic development

Plant - production and primary products

10.0

42.5

47.3

99.9

0.6

Animal - production and primary products

8.2

22.6

37.5

68.3

0.3

Mineral resources (excl. energy)

37.6

102.2

511.3

651.1

1.2

Energy resources

23.3

53.9

190.9

268.1

0.6

Energy supply

40.7

49.5

80.5

170.8

0.7

Manufacturing

208.1

1,280.1

1,441.3

2,929.5

16.7

Construction

17.3

85.3

165.0

267.6

1.0

Transport

16.5

56.2

55.0

127.7

0.8

Information and communication services

53.4

648.1

423.4

1,124.9

7.7

Commercial services and tourism

25.9

459.8

323.7

809.4

4.0

Economic framework

0.6

9.8

4.6

15.0

0.1

Total

441.7

2,810.1

3,280.6

6,532.4

33.7

Society

Health

34.4

184.1

172.0

390.5

2.1

Education and training

0.9

10.1

5.5

16.5

0.2

Social development and community services

2.3

19.8

10.1

32.1

0.3

Total

37.5

214.0

187.6

439.1

2.6

Environment

Environmental policy frameworks and other aspects

1.0

9.1

8.5

18.6

0.1

Environmental management

6.1

18.4

25.4

49.9

0.3

Total

7.1

27.5

34.0

68.5

0.4

Non-oriented research

0.2

1.5

1.0

2.7

-

Total

491.3

3,157.2

3,571.7

7,220.2

38.1

(a) Data were subjectively allocated by providers at the time of reporting, using OECD/ABS definitions. The ABS makes every effort to ensure correct and consistent interpretation and reporting of these data and applies consistent processing methodologies. Readers using these data should bear in mind the original subjectivity of the information.

Information was collected by the ABS in 2003-04 on biotechnology related R&D. Biotechnology is the application of science and engineering principles to living organisms as well as parts, products or models thereof, to alter living or non-living materials for the production of knowledge, goods and services.

In 2003-04, 304 businesses performed and/or paid another to perform biotechnology related R&D, totalling $378m in expenditure. As businesses could both perform and pay another to perform their R&D, the sum of businesses in table 25.11 is higher than the actual count of businesses (304). There was $271m (4% of BERD) of biotechnology related R&D expenditure, which was performed by 227 businesses. There were 155 businesses which paid $107m to others to perform biotechnology related R&D (table 25.11).

Property and business services reported the highest number of biotechnology R&D active businesses and the highest level of expenditure on both biotechnology related R&D performed by the business ($187m) and paid to another ($81m) (table 25.11).

Most businesses classified their biotechnology related R&D to human health which represented $263m or 70% of total biotechnology related R&D. Agricultural biotechnology had the next highest expenditure of $43m or 11% of total biotechnology related R&D expenditure.

Of the 304 biotechnology R&D active businesses, approximately half (155) paid others to perform biotechnology related R&D. There were 145 businesses which paid one or more Australian organisations to perform biotechnology related R&D on their behalf. Of these 66% paid a university or other higher education institution, 13% paid the Commonwealth Scientific and Industrial Research Organisation, 30% paid another government or private non-profit research institute, 27% paid a contract research organisation and 15% paid another business.

There were 36 businesses which paid overseas organisations to perform biotechnology related R&D. The locations most frequently reported were the United States of America, England and Canada.

The most common reason cited for outsourcing biotechnology related R&D was a lack of technical skill/expertise.

GENERAL GOVERNMENT SECTOR

Expenditure on R&D carried out by Commonwealth, and state and territory government organisations in 2002-03 was $2,482m, a 5% increase on expenditure in 2000-01 (table 25.2).

The research fields in which most government R&D expenditure took place were: Agricultural, veterinary and environmental sciences ($761m, or 31%); Engineering and technology ($424m, or 17%); Biological sciences ($263m, or 11%); Earth sciences ($242m, or 10%); and Medical and health sciences ($198m, or 8%) (table 25.12).

(a) Subjectively allocated by providers at the time of reporting, using OECD/ABS definitions. The ABS makes every effort to ensure correct and consistent interpretation and reporting of these data and applies consistent processing methodologies. Readers using these data should bear in mind the original subjectivity of the information.

Source: Research and Experimental Development, Government and Private Non-profit Organisations, Australia, 2002-03 (8109.0).

(a) Subjectively allocated by providers at the time of reporting, using OECD/ABS definitions. The ABS makes every effort to ensure correct and consistent interpretation and reporting of these data and applies consistent processing methodologies. Readers using these data should bear in mind the original subjectivity of the information.

Source: Research and Experimental Development, Government and Private Non-profit Organisations, Australia, 2002-03 (8109.0).

HIGHER EDUCATION SECTOR

Estimated expenditure on R&D carried out by the higher education sector in 2002 was $3,430m, an increase of 23% over expenditure in 2000, and 34% over expenditure in 1998 (table 25.2).

The major fields of research in which higher education R&D expenditure took place in 2002 were: Medical and health sciences ($864m, or 25% of total expenditure); Biological sciences ($410m, or 12%); Engineering and technology ($375m, or 11%); and Agricultural, veterinary and environmental sciences ($235m, or 7%). Direct labour costs accounted for 42% of total R&D expenditure (table 25.14).

A slightly different pattern applied to human resources devoted to R&D, with 19% on Medical and health sciences, 10% on Engineering and technology, 10% on Biological sciences and 6% on Agricultural, veterinary and environmental sciences (table 25.14).

25.14 HIGHER EDUCATION R&D RESOURCES, By research field(a) - 2002

Expenditure on R&D

Land
and
buildings

Other
capital expenditure

Direct
labour
costs

Scholar-
ships

Other
current expenditure

Total

Human
resources devoted
to R&D

$m

$m

$m

$m

$m

$m

’000 person
years

Mathematical sciences

0.9

2.5

30.4

4.1

26.1

64.0

0.8

Physical sciences

1.0

11.1

57.4

6.6

53.3

129.4

1.4

Chemical sciences

18.5

11.1

57.3

12.3

56.1

155.2

1.9

Earth sciences

1.1

11.2

47.4

7.7

46.7

114.1

1.5

Biological sciences

56.2

21.5

146.4

26.1

160.0

410.2

4.8

Information, computing and communication sciences

2.0

11.2

62.3

11.1

57.5

144.1

2.2

Engineering and technology

6.6

28.7

150.3

30.7

158.2

374.5

5.2

Agricultural, veterinary and environmental sciences

3.7

11.0

99.9

18.0

102.6

235.2

3.1

Medical and health sciences

16.0

44.0

353.1

41.2

409.6

863.8

9.4

Education

3.0

3.3

58.0

11.2

52.9

128.4

3.1

Economics

1.7

1.7

38.8

4.3

37.4

83.8

1.2

Commerce, management, tourism and services

3.3

4.0

65.4

7.3

57.2

137.2

2.5

Studies in human society

1.9

2.6

48.9

9.9

48.1

111.4

2.3

Behavioural and cognitive sciences

2.7

4.4

51.2

10.5

44.5

113.3

2.2

Other research fields

12.7

8.5

170.0

36.2

137.7

365.0

8.1

Total

131.2

176.7

1,436.8

237.3

1,447.6

3,429.6

49.6

(a) Subjectively allocated by providers at the time of reporting, using OECD/ABS definitions. The ABS makes every effort to ensure correct and consistent interpretation and reporting of these data and applies consistent processing methodologies. Readers using these data should bear in mind the original subjectivity of the information.

In terms of socioeconomic objectives, most higher education R&D expenditure ($1,474m or 43%) was directed towards society. About 29% was directed towards economic development, 21% towards non-oriented research and 6% towards environment. The major subdivision within society was health with 28% of total R&D expenditure (table 25.15).

(a) Subjectively allocated by providers at the time of reporting, using OECD/ABS definitions. The ABS makes every effort to ensure correct and consistent interpretation and reporting of these data and applies consistent processing methodologies. Readers using these data should bear in mind the original subjectivity of the information.

Expenditure on R&D carried out by private non-profit organisations in 2002-03 was $360m, an increase an 24% on expenditure in 2000-01 (table 25.2).

Medical and health sciences comprised the major research field for R&D expenditure in the private non-profit sector, accounting for $221m (61%) of the sector's total R&D expenditure in 2002-03. Labour costs continued to be the main component of R&D expenditure (50%) (table 25.16).

Medical and health sciences also comprised the leading research field in terms of human resource use (table 25.16).

(a) Subjectively allocated by providers at the time of reporting, using OECD/ABS definitions. The ABS makes every effort to ensure correct and consistent interpretation and reporting of these data and applies consistent processing methodologies. Readers using these data should bear in mind the original subjectivity of the information.(b) Not available for publication but included in totals where applicable, unless otherwise indicated.

Source: Research and Experimental Development, Government and Private Non-profit Organisations, Australia, 2002-03 (8109.0).

In the private non-profit sector, health was the main socioeconomic objective, accounting for 90% or $324m of total R&D expenditure. Education and training accounted for $20m (6%), while $11m (3%) was directed towards economic development (table 25.17).

(a) Subjectively allocated by providers at the time of reporting, using OECD/ABS definitions. The ABS makes every effort to ensure correct and consistent interpretation and reporting of these data and applies consistent processing methodologies. Readers using these data should bear in mind the original subjectivity of the information.(b) Not available for publication but included in totals where applicable, unless otherwise indicated.

Source: Research and Experimental Development, Government and Private Non-profit Organisations, Australia, 2002-03 (8109.0).

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